In the second screenshot each torus is handled as an arbitrary mesh to simulate a swinging chain. This is a bit overkill: point-to-point constaints would be more efficient here! Nonetheless it works well.

Here you can see improved cloth-mesh collision. In my last simulator collisions were only working between cloth and spheres. I've improved it a bit and now the cloth patch collides with any meshes. Also, I've moved to Verlet integration since last time.

I'm currently working on a very interesting part : blending physics and standard character control. Traditionally your main character uses a lot of canned animations (Oni certainly used a *lot* of them), and a state machine drives the whole thing. Interactions with the world are often limited, if not completely scripted. Using a physics engine to model those interactions offers a lot of extra freedom, but the actual transitions from "canned" to "physically-driven" are often very tricky to do.